Angry Doctor

Friday, February 10, 2006

Free at the Point of Delivery 2

But what cost at the point of taxation?

A letter to Today on Wednesday, written in response to another one regarding healthcare spending, has this suggestion:

"We could perhaps work towards increasing personal taxes to cover Government healthcare cost and make healthcare free for every citizen."

That got me thinking: what would it cost to provide free healthcare for all citizens?

It was a few days before I could find this article (which we might discuss perhaps another time) with the statistics I was looking for. Again, I remind all that I failed statistics in med school, so take the bits that follow with a pinch of salt…

Now figure 3 gives you the total national health expenditure, and breakdown into Government and Private expenditure.

The figure for the year 2000 is about S$4.7 billion, with the Private expenditure amounting to about S$3.5 billion.

Now the Government part is already being paid for by the taxes we now pay, so if we want to provide free healthcare, we need to raise another S$3.5 billion or so per year (assuming we don’t want to disturb the rest of the Budget).

With a population of about 3.5 million (counting citizens only), that works out to about S$1000 per capita per year. And that’s over and above what you already pay in taxes.

So for a family of four with one working adult and two children, that’s S$4000 per year. If this working adult makes just enough to not have to pay income tax (S$1800 per month?), that’s 18.5% of his income each year.

Another way of looking at it is as a monthly rate of S$83 per person. Doesn’t sound like much, but to spend that amount of money on healthcare, you will have to do one of the following:

1. See a doctor at the polyclinic once a week
2. See a private GP once a fortnight
3. Visit the A&E once a month
4. Have a hernia operation once a quarter
5. Have your appendix taken out every six months
6. Have your gallbladder taken out every year
7. Go for a heart bypass every 2 years
8. Have a baby once every 3 years
9. Be on long-term medication that cost you S$2.75 per day.

If you are already doing one or more of the above now, then you would probably want to lobby for free healthcare.

If you are not, then you probably wouldn’t. But if you WERE paying S$1000 a year, wouldn’t you be doing all of the above?

I used to think that people would not consume more healthcare than they need to, but I soon realised how wrong I was after starting work.

Why take a cab to the GP when you can get an ambulance and be seen at the A&E for free?

Why NOT have an X-ray for that ache in your leg after running the 2.4km yesterday, since it is free? Better yet, gimme an MRI!

I am sure you can think of other things to add to the list.

Net result? The total healthcare expenditure will soon exceed S$4.7 billion, and your per capita taxation will soon be more than S$1000.

So let’s all be careful what we wish for…



  • I do agree with the point that once health care becomes "free", then the overall expenditure on health care would go up due to the reasons you outlined.

    However, I somewhat question the figure of 4.7 billion. Notice 1.2 billion is govt spending and 3.5 billion is private spending.

    Now the cost of health care in the private sector eg private hospitals and clinics is much higher than in the public sector. How much of the 3.5 billion is money spent in the privately provided, privately funded health care centres? What is the amount of private spending in the publicly provided health care centres?

    Nevertheless it would be almost impossible to restructure the current system of healthcare in Singapore ie public and private services in a two tier delivery structure. Thus we would use the 4.7 billion dollar value as the realistic figure to base calculations on.

    One way of controlling the artificially induced demand is to let every Singaporean have a Medicalcare account which has a fixed amount of money contributed by the govt every month.

    In a way it works like this : income tax of X%. Govt gives $83 per month into every Singaporean's Medicalcare account.

    In that sense, the rich would be taxed more on a dollar value(based on %) compared to the lower income earners. But every Singaporean is given the same amount of funds to spend on healthcare.

    In this way, the medicalcare account money is yours. On death of course it is part of your estate. Health care is effectively almost "free" because based on the calculations, the likelihood of you having to spend extra from your personal account should not happen. Of course there will be exceptions. That would be a problem to tackle. Perhaps charity organizations or MOH would do the job of deciding who gets charity help.

    In a way this is similar to the current system. Except that the rich are taxed more and thus in a way help the poor and unemployed as far as health care is concerned. An unemployed person still falls sick and so having $83 credited into the medicalcare account would be helpful. Currently we have A class wards in public provided hospitals. I believe the same intention is there to earn from the rich to subsidize the poor. But why have to spend resources doing this? Just have a tax and leave the public sector as all B1 class wards. I am sure the men in the C class wards would be all the happier. Many studies have shown that large open many bed type wards have high levels of iatrogenic infection and standards of care drop. Is it right for us to segregate the care of similarly sick people just based on how much they can pay? Is that on principle correct? We argue always that the medical side of care in the C class wards and A class wards is comparable. But what really is "medical care"? Does it not constitute the environment that one convalesces?

    Idea thus is tax you first, then pay you back and then it's your own money to spend.

    I'm absolutely aware that this idea has lots of flaws and is very very raw but it's open to discussion.

    By Blogger Dr Oz bloke, At February 11, 2006 10:31 am  

  • I think something like 70% of Singaporeans do not pay income tax, so the 30% who do will have to bear that $3.5 billion needed.

    $1000 a year for life means S$70,000 for most people! Not sure we can afford that AND let that be part of their estate. the rich would be up in arms. :)

    Still, that is an excellent way of encouraging people to live long and stay healthy - if you don't spend any of the $70,000, you can leave a small inheritence to your children! An only child can look forward to $140,000 upon his parent's death.

    A more Singaporean approach would probably be to let you voluntarily contribute a monthly amount into your Medicalcare Account, which the government will match dollar-for-dollar, up to a maximum of say $42/$84 per month?

    The current government health expenditure is about $1.6 billion per year, with about 70% going into subsidising healthcare.

    By Blogger angry doc, At February 11, 2006 10:45 am  

  • Very skeptical with statistics... can you kindly enlighten me what exactly constitutes that S$3.5bn? Strictly monies spent by S'pore residents on healthcare?

    You cannot assume that it’s only S$3.5bn, coz looking at the demographic trend of the S’pore aging population, even if the consumer is prudent and not abusing the "free healthcare system", the healthcare expenditure is still gonna escalate at an exponential rate for the next 10-20 yrs anyway.

    Looking at the various countries struggling with rising healthcare costs, don't think "free healthcare" model is sustainable.
    It's more important to scrutinize the Efficiency in utilization of resources to make sure we maximize each healthcare dollar spent.

    The "medicalcare" a/c sounds like another medisave a/c. Then why not just get govt to match $ for $ to our medisave a/c?

    By Blogger pretzel, At February 11, 2006 10:54 am  

  • The author did not specify, but I suspect he means verything the Singapore government and people spend on halthcare per year, say consultation, procedure, tests, drugs, etc.

    Personally I don't have a very good idea of how much Singaporeans spend collectively on healthcare each year, hence the need to find and rely on the article. More importantly, we are looking at the sum total and averages here - certainly most people spend far less than $1000 a year, and those with serious illnesses chalk up $30,000 in one admission (before subsidy) easily.

    By Blogger angry doc, At February 11, 2006 11:11 am  

  • Asking the govt to match dollar for dollar contributions is a good idea.

    But inevitably the money has to come from somewhere.

    Anyway my philosophy as far as health care is concerned is socialist in nature.

    To me a rich man suffering from a heart attack and a poor man suffering from a heart attack should not be treated differently by state run health care.

    There is a certain standard of care which should be satisfied. At present evidence has shown that our 40+ bedder C class wards carry significant iatrogenic risks to the patients. They should not be there at all. I believe this is also the source of much frustration and unhappiness to the majority of Singaporeans admitted into hospital. Whenever anything does not go according to their expectations eg patient dies, or complications arise or calls for help to the nurse are not responded to promptly, they feel it is discrimination against the poor.

    Do they have valid reasons to make that accusation? I say they do.

    Why do we need to have state run hospitals renovating and making the hospital look hotel like to attract foreign nationals? And then we put the majority of Singaporeans into non-airconditioned 40+ bed wards with only 1-2 nurse on duty at night?

    Are our resources well spent? We hear of how the Health clusters make PROFITS. Where do the profits come from? Should we not be redistributing the profits in another way that helps the average man on the street?

    I feel the objective of the state run hospitals is very convoluted.

    By Blogger Dr Oz bloke, At February 11, 2006 11:28 am  

  • "A more Singaporean approach would probably be to let you voluntarily contribute a monthly amount into your Medicalcare Account, which the government will match dollar-for-dollar"

    I suppose that a poor man would rather have more cash with him and hence, more reluctant to part with his money especially if he has a family to support and thus it may not be realistic. Therefore the poor will not benefit from this as well.

    By Blogger JY, At February 11, 2006 11:28 pm  

  • I didn't say it was good, I just said it was more Singaporean. :)

    By Blogger angry doc, At February 12, 2006 11:42 am  

  • What's the purpose of this lame topic?

    The present system is already good enough.

    Free healthcare for everyone? That's the surest route to perdition for the country.Knowing how singaporeans are, they want to get value for money so if you tax them $1K a year, they'll make sure they can get back $5 k worth of value. Maybe even getting an extra gallbladder removed. Hee Hee.

    For $1K annually, I can get an all in comprehensive hospitalization and
    medical package TENABLE IN A PRIVATE HOSPITAL.

    My granddaughter was down with viral fever recently. We put her in a private room ensuite, almost like a luxurious hotel and all expenses was borne by the insurance company. And the father needn't even pay $1K of premium per annum.

    If you can't pay business class fly economical. There's always the polyclinics and the government hospitals where greenhorns lurk to practice what they learned from the good ole prof. on you.


    By Blogger uglybaldie, At February 12, 2006 7:57 pm  

  • There is a simple way to find the additional dollars that would go into funding a basic medical package for ALL Singaporeans without the need for large out of pocket expenditures - just use some of the revenues from cigarette and liquor taxes. There would still be plenty left over to ensure that Singaporeans all have access to evidence-based medical care such as ACE-Is or ARBs for prevention of DM nephropathy, annual Pap smears and mammograms, BMT for CML, etc etc

    By Anonymous Anonymous, At February 13, 2006 8:53 am  

  • How much does the govt collect in taxes from alcohol and cigarettes?

    Is is really more than 4.7 billion?


    But it's a bit funny too. In effect the smokers and drinkers are the ones supporting the country's health care system if that were implemented!

    By Blogger Dr Oz bloke, At February 13, 2006 10:55 am  

  • Uglybaldie,

    Would I be wrong to say that you are one those people who feel that the poor deserve to be poor and Singapore would be better off if they went away or simply dropped dead?

    By Blogger Dr Oz bloke, At February 13, 2006 10:56 am  

  • Apparently not, Oz Bloke:

    page 27; for FY2005, tobacco brought $942 million, and alcohol $371 million.

    $1.3 billion doesn't even cover the Government Health Care Expenditure of about $1.6 billion.

    By Blogger angry doc, At February 13, 2006 11:04 am  

  • So anonymous was talking cock....

    Haha....sounded too good to be true.

    By Blogger Dr Oz bloke, At February 13, 2006 11:48 am  

  • Don't think you can take the S$3.5bn wholesale. Need to breakdown further on exactly how much of this "private expenditure" is spent in non-private hospitals/healthcare services if you want to provide free healthcare to the S'pore residents.

    I recall reading the recommendations by the ERC sub-comm on positioning SG as the regional medical hub, the #s they used, and the assumption made is that this # includes the monies spent by Foreign patients.

    By Anonymous Anonymous, At February 13, 2006 2:01 pm  

  • OZ,

    No lah. I just want to say everyone should buy more insurance to cover their medical needs instead of spending money drinking beer and smoking and buying four D.

    There are no poor people in Singapore lah. Only stupid ones.

    And if we follow the reasoning of this blogger, isn't it just stupid to expect everyone to contribute an extra $1K to tax so that the irresponsible like smokers can get free medical services?These fellows have a death wish then they jolly well pay for it themselves.

    By Blogger uglybaldie, At February 14, 2006 12:08 am  

  • I am absolutely certain that having medical care free at the point of entry leads to complacency and abuse. I have watched it with increasing horror in the NHS for 20 years.

    People attend for medical consultations for the most unmitigated trivia; they demand inappropriate tests and, in particular, inappropriate medication.

    I am committed to good health care for all, and I never thought I would ever want to change the "free" principle but common sense has triumphed.

    As I have argued many times (and people seem to thing it is a trivial debating point - it is not) why is food not "free at the point of entry to the supermarket"?

    Food is even more important than health care.


    By Anonymous Anonymous, At February 15, 2006 12:36 am  

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